Ascending Skies: Exploring the Opportunities in Indian Space Sector

22 Sep 2023 | Newsletter

Manisha SinghLexOrbis, India
Shivi GuptaLexOrbis, India

The Indian space sector has emerged as a beacon of technological advancements and innovation, bolstering the country as one of the top nations in the global space economy. Within the past decade, the Indian Space Research Organisation (ISRO) has achieved momentous milestones since its grounded beginning in 1969. August 23, 2023, was a historic day for the Indian space arena, with India becoming one of the only four countries to successfully land a spacecraft on the lunar surface. With Chandrayaan-3 landing making a successful touchdown on the moon’s surface, India also became the only country to land on the unchartered south pole of the moon.

In commemoration of this achievement and to remember this feat for generations to come, August 23 has now been announced to be celebrated as the “National Space Day”. The Indian Prime Minister also equated this achievement with taking the “Make in India initiative all the way to the moon”.

Glance at the Indian Space Sector in Number

India currently holds approximately 2% share of the global space economy which currently stands at USD 360 billion. The sector has been forecasted to witness an increase at almost 48% CAGR by 2028 to increase its share from USD 7 billion to around 50 billion. There are more than 400 entities engaged with ISRO, including numerous large corporations as well as MSME players that have been working towards developing myriad systems and components for a more advanced space infrastructure and successful launches. This number places India as the fifth country in the global arena with the highest number of entities engaged in the space sector.

The successful orbital entry by Mangalyaan for Mars exploration on September 23, 2014, also makes ISRO one of the only four space agencies in the world to achieve so. Achieving another milestone, ISRO also launched Aditya-L1, which will travel for around 1.5 million kilometres toward the Sun to perform extensive studies on the star’s outer atmosphere.

The formation of the Indian National Space Promotion and Authorization Centre (IN–SPACe) has played a crucial role as a facilitator between ISRO and private sector participants. Under the recently approved Indian Space Policy, 2023, IN-SPACe has been given the role of a single-window agency to authorise space activities undertaken by the Government and private players. It is also responsible for promoting industry clusters, zones, manufacturing hubs, incubation centres, accelerators, and technical centres for emerging activities in the space sector.

The commercial division of ISRO, New Space India Limited (NSIL), also enables Indian industries to undertake high-technology space-related functions. A total investment of USD 1.2 billion has been announced by NSIL for increasing these commercial activities and the involvement of Indian industries in the space sector.

Another evidentiary move by the Indian Government towards boosting the space sector is the allocation of INR 12, 543.91 crore to the Department of Space in Budget 2023-24. The budget allocation will enable the ISRO and IN-SPACe to facilitate better programmes and regulations for private sector participation in the country.

Make in India: Boosting Manufacturing in the Space Sector

Dating back to 2014, the “Make in India” initiative by the Indian Government has focussed on raising more awareness and funds to bolster the manufacturing sector of the country. In this past decade, the focus has also been heavily on setting up a robust space programme domestically and reducing India’s dependence on foreign manufacturers and space service providers.

With a heavy focus on manufacturing satellites, launch solutions, orbit management solutions, etc., indigenously, the manufacturing segment in the space sector is expected to make India one of the forerunners in the global space economy in the coming years. The “Make in India” initiative in the space sector is also expected to drive more innovation in the software sector, with data being termed as the “new fuel” to drive growth.

It will also serve as a key driver for attracting more foreign direct investment for space startups and related technology companies in India. FDI in the space sector will allow more Indian spacetech companies to collaborate with foreign investors and foster more knowledge exchange, and better-funded research and development.

The Rise of Spacetech Startups in India

The Indian space industry has been witnessing remarkable growth, especially with more startups entering the market with their avant-garde technologies and knowledge. Currently, there are 101 startups in India that operate in the space sector, having received a total funding of around USD 108.52 million. This rapid propulsion in investment has stemmed from factors such as the government’s push towards more private player participation, increase in demand for geospatial technology, lower cost of production, and shift towards lowering the reliance on foreign players for satellite components, launch facilitation services, etc.

In November 2022, the first privately developed rocket, Vikram-S was launched by the Indian space startup Skyroot Aerospace. Furthermore, Agnikul Cosmos, a private Indian company set up India’s first launch pad at the Satish Dhawan Space Centre. Bellatrix Aerospace, another Indian space startup is engaged in advanced in-space propulsion systems and rocket propulsion technologies.

After the successful lunar landing by Chandrayaan-3, there has been an evident intrigue of investors and venture capitalist firms in the Indian space tech startup sector. Recently, on September 5, 2023, spacetech startup Manastu Space announced a $3 million pre-series A funding round. The Mumbai-based startup is involved in providing solutions relating to green propulsion and debris collision avoidance systems for space debris.

The Indian Space Policy, 2023 has also provided much-needed clarity on the role of private sector participants and removed stern barriers to their entry in the sector. The move has now paved the way for more spacetech startups to enter the aerospace, communications, defence, telecom, materials, chemicals, and precision engineering sectors that supplement the country’s space programmes. Other sectors that hold significant potential for Indian spacetech startups are nanosatellites, disaster management, telemedicine, imaging, navigation, collective robotics, AI, oceanographic studies, broadband services, and augmented and virtual reality.

Universal Opportunities for Indian Businesses in the Space Sector

The surge in demand for more supplementary services is poised to increase the demand for more space-based businesses in India. Areas such as data communication, media, entertainment, and even tourism are also set to witness more innovative startups mushrooming in the country, pushing India towards becoming a commercial hub for cutting-edge space technologies.

With the constantly evolving legal arena of the country, the ease of doing business in the space sector will increase, and more MSMEs and startups will find it easier to enter the sector. The new policies on foreign trade, the space sector, and protection of assets such as intellectual property, data, financial incentives, etc., will also make it easier for new entrants to leverage this growth spurt. The satellite launch segment also holds numerous opportunities for startups and MSMEs in India, especially for the development of orbit management solutions relating to LEO, MEO, and GEO satellite launches.

In Conclusion

The space sector in India has finally reached to point where it offers abundant opportunities to emerging technology businesses that have the potential to minimise the costs of space operations significantly. The vision of “Make in India” and “Aatmanirbhar Bharat” initiatives call for a remodelling of the mostly government-led space sector of the country. To fulfil the present vision of increasing India’s share in the global space economy, private sector participation and boost to India’s space startup sector is irrefutable. With a robust regulatory framework, more schemes to promote ease of doing business for spacetech businesses, and a pathway for private sector investment, the space sector of the country holds the potential to become a trailblazer in the global space market.